Each and every company goes through a typical lifecycle; from its inception to its death. For some companies, this lifecycle lasts only a few years, yet for others, it can last for hundreds of years. Ichak Adizes, an expert in the field of management, has put forward a framework that depicts and explains the lifecycle that companies go through by breaking it down into 10 stages.
The Courtship stage is where the initial idea is developed in the minds of a person or a group of people. No substantial steps have been taken so far; everything remains in the head of the potential founder. This step ends the moment a final decision is made, along with all the commitments and risks that come with it.
Once the decision has been taken, the company starts to form. This stage is very demanding for the founders as they need to put in a significant amount of time, energy, money and effort to get the business going. As a result, the risk of failing here is very high.
Here, the company is starting to grow rapidly by grabbing each opportunity that comes along the way. Mistakes and problems are very common during this stage since processes and systems are not yet sufficient to handle the ongoing work. At this point, there is a high need of work delegation and decentralization.
As more control is passed from the founders to departmental managers, the company will likely experience a loss of direction due to the attitude inconsistency between the founders and managers. Conflicts are likely to arise and in order to get out quickly and safely, you will need to keep a close eye on what is going on.
The fifth step of the model is very critical as companies who successfully complete this stage will likely succeed over the long term. If your company is still alive during this phase it means that your organization is structured well and the business is efficiently operating.
At this point, many companies lose sight of their ambitious vision. They often settle for what they have and neglect to chase new opportunities and future projects that can help them overtake the competition over the long-term.
This is where resistance to change comes into play. As companies mature, they are often reluctant to change how things are being done. This results in failure to adapt to new market trends and needs, and the company’s performance starts to go downhill.
The transition to the recrimination stage brings declining profits and a lot of conflicts between the team for whom to blame. Unfortunately, cutting costs down is not the solution to the problem.
Within this stage, the company culture is completely changed and people have already started to leave the place. Profit can hardly be generated at this stage.
It goes without saying that the last stage of the model is death. If a company has reached this stage, then there is no value left to sell.